The European Commission has opened an in-depth investigation to assess whether Romanian support measures in favor of Complexul Energetic Oltenia SA (‘CE Oltenia’) would be in line with EU rules on State aid to companies in difficulty.
CE Oltenia, a Romanian majority state-owned lignite-based electricity producer, has been experiencing financial difficulties.
Following a temporary rescue aid granted by Romania to the company after being approved by the Commission under EU State aid rules in February 2020, on 4 December 2020, Romania notified the Commission a plan for the restructuring of CE Oltenia.
The restructuring plan foresees around €2 billion (RON 9.93 billion) of support to CE Oltenia, of which €1.33 billion (RON 6.48 billion) of public support by the Romanian State, in the form of grants and loans (including the €251 million rescue loan that CE Oltenia did not reimburse). The remaining amount would be covered by EU funds, more specifically, a grant by the Modernization Fund, that Romania would apply for.
EU State aid rules, more specifically the Commission’s Guidelines on rescue and restructuring aid, enable Member States to support companies in difficulty, under certain strict conditions. In particular, aid may be granted for a period of up to six months (‘rescue aid’). Beyond this period, the aid must either be reimbursed or Member States must notify a restructuring plan to the Commission for the aid to be approved (‘restructuring aid’). The plan must ensure that the viability of the company can be restored without further State support, that the company contributes to an adequate level to the costs of its restructuring and that distortions of competition created by the aid are addressed through compensatory measures, including in particular structural measures.
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